Clarifications on "Prioritized Experience Replay" (Deepmind, 2015)
for 1) i think your confusing elements touched vs sequences. At each point for N turns you have 2 possible options, therefore you have $\prod_{i=1}^N 2$ or $2^N$ possible sequences.   

for 2) The priorities are updated based on the expected rewards. They do not add new elements each time, they update